‘Market research does not make decisions and it does not guarantee success.’
Businesses conduct market research to research the market in order to sell their products, and seek other benefits from doing so. All of the marketing activities of the firm are direct results of prior marketing decisions which are indeed based on the market research.
In fact, the success of the firm’s marketing mainly relies on how well customers’ needs and wants are identified and fulfilled. And, market research helps with that.
Definition of market research
Market research is a broad process of finding out, collecting, recording, collating and analyzing data and information about the market, customers and competitors.
Paul Green and Donald Tull have defined marketing research as follows:
‘Market research is the systematic and objective search for, and analysis of, information relevant to the identification and solution of any problem in the field of marketing.’
According to The American Marketing Association (AMA) market research is:
‘Market research is the systematic gathering, recording and analyzing of data about problems relating to the marketing of goods and services.’
Philip Kotler gave the following definition of market research:
‘Market research is a systematic problem analysis, model building and fact finding for the purpose of improved decision-making and control in the marketing of goods and services.’
According to David Luck, Donald Taylor, and Hugh Wales, market research can be defined as:
’Market research is the application of scientific methods in the solution of marketing problems.’
Key words in the definition of market research
The key words in this definition are systematic, objective and analytical.
Market research seeks to set about its task in a systematic and objective fashion. This means that a detailed and carefully designed research plan is developed in which each stage of the research is specified.
Such a market research plan is only considered adequate, if it specifies: the market research problem in concise and precise terms, the information necessary to address the problem, the methods to be employed in gathering the information and the analytical techniques to be used to interpret it.
The third of the key terms in the definition given a little earlier was analytical. The marketing researcher’s task goes beyond collecting data. He must also interpret the data in terms of what it means to the business organization which commissioned the research. Knowing that 60% of those interviewed thought that Product A was superior to Product B is, in itself, of little value.
The business organization also needs to know the alternative ways it can respond to this data. Data is equivalent to the raw materials of manufacturing. It has to be converted into information before it becomes useful in business decision making.
The process of converting data into information is achieved through analysis.
What is market research looking into?
Market research is the basis of one of the approaches to marketing which is Market Orientation. Finding out and focusing on what customers need and are willing to buy. Discovering important characteristics of customers. Following competitors’ strategies. Describing market conditions. That is why market research is necessary as a starting point towards marketing goods and services successfully.
A. Customers. Market research is concerned with whether existing customers and potential customers will buy the firm’s product(s). Market research provides business with opinions, beliefs and preferences of those two types of customers in order to establish what they need and want – customer profiles.
B. Market. The research provides the business with important characteristics of the markets where the business operates and any future markets that the business is planning to enter into. Specifically, features of markets including: market location, market size, customer base, market share, special characteristics, barriers to entry and competition.
C. Competition. Researching competitors and analyzing the results will give the business insights into direct and indirect companies that produce identical or similar products.
In short, market research is one of the marketing activities focused on discovering details regarding problems related to consumption of goods and services.
